Pictures: Eight Biggest Energy Stories of 2012

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Pictures: Eight Biggest Energy Stories of 2012

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Energy Impacts from Extreme Weather

An exploding transformer lit up part of lower Manhattan, which was otherwise plunged into darkness during power outages in the wake of Hurricane Sandy in October 2012. Mother Nature roughed up the power industry this year—and some believe she got a boost from human-driven climate change.

Sandy knocked out power to some 8.5 million homes and businesses in 16 states. Damage from the storm highlighted the aging and vulnerable grid infrastructure found across much of the U.S., which many states are working to update with smarter electric-distribution systems that can quickly identify and respond to trouble. (See "Can Hurricane Sandy Shed Light on Curbing Power Outages?")

During the lead-up to Labor Day, Hurricane Isaac was part of a perfect storm that drove pump prices sky high just before one of the year's biggest travel weekends. The approaching storm shut down Gulf Coast refineries, which caused dips in inventory and reactionary spikes in gasoline prices. (See "Isaac Drives Spike in U.S. Gas Prices Ahead of Labor Day Weekend.")

Not all of the stress on the power grid came from storms. Record-breaking drought conditions that gripped much of the U.S. over the summer also took a toll. Nuclear power plants, which require water for cooling, were forced to scale back production, and some shut down—even as heat drove demand for air-conditioning and electricity. Hydroelectric power production was also slowed during summer 2012's extended dog days. (See "Record Heat, Drought Pose Problems for U.S. Electric Power.")

It's all due to hydraulic fracturing, or fracking, a new combination of old technologies that has yielded astounding results. Using high-pressure water, sand, and chemicals, the energy industry has been able to force abundant oil and natural gas production from underground shale formations around the United States. (See interactive, "Breaking Fuel From Rock.")

Controversy abounds over fracking's impact on land, water, and air. But there's no question it has boosted energy resources and local economies. (See Special Report, "The Great Shale Gas Rush")

Nowhere is this more visible in North Dakota, which has the lowest unemployment rate in the United States (3.1 percent.)

As workers labored in October on this True Company rig outside Watford City, North Dakota set a new one-month record for issuance of drilling permits, 370, up tenfold from just five years ago. (Related: "Shale Oil Boom Takes Hold on the Plains")

The Ohi plant in western Japan, seen here, houses the only two operating nuclear reactors in a nation that once aspired to draw half of its electricity from atomic power. Japan has struggled to reshape its energy future after the earthquake- and tsunami-triggered Fukushima Daiichi disaster in March 2011. The restart of two Ohi reactors this summer sparked historic protests in Tokyo, illustrating the challenge for Japan as it attempts to balance its need to restore its economy with a requirement to ensure public safety. (See "Nuclear Restart Generates Power, Protest in Japan.")

Japan's other 52 reactors remain shuttered while safety evaluations continue. This week, government-appointed experts announced that two of the plants, Higashidori in northern Japan and Tsuruga, in the center of the country, sit atop active seismic faults. The findings raise the prospect that the facilities will be closed for good.

Nuclear power provided one-third of Japan's electricity before the Fukushima disaster. Interest is high in replacing that lost generation with renewable energy, but in the short-term Japan is relying on imports of expensive fossil fuels and deep conservation efforts. (See "One Year After Fukushima, Japan Faces Shortages of Energy, Trust.")

A blast furnace in Baotou, Inner Mongolia, is part of a Chinese steel industry that has been expanding at a rate of 17 percent a year. Similar growth, spread across the enormous Chinese economy, requires a staggering amount of energy, making the nation the world's leading energy consumer and the biggest producer of greenhouse gas emissions. To meet these needs, China is exploring virtually every energy source and technology in the book. (See "Pictures: A Rare Look Inside China's Energy Machine.")

Coal is China's primary power source, but the government hopes that cleaner shale gas will supply 6 percent by 2020. China's reserves of natural gas are 50 percent larger than those of the United States. But China has unique geological challenges, pipeline infrastructure problems, and localized shortages of the water so essential to the process. (See "China Drills Into Shale Gas, Targeting Huge Reserves Amid Challenges.")

China also has cashed in on commercial clean-tech failures, acquiring foreign technology and expertise, along with struggling Western companies such as A123, which auto-parts maker Wanxiang Group acquired in December. (See blog post: "Battery Maker A123 Sold at Auction to Chinese Firm.")

In one crucial but little-known energy area, China is holding most of the world's cards: rare-earth minerals such as yttrium, dysprosium, and neodymium, which are already essential for computers and mobile phones and key to new energy technologies from photovoltaic cells to wind turbines. China controls some 95 percent of the world's production, and its restrictive trade practices have drawn a WTO complaint from the United States, European Union, and Japan. (See "While Rare-Earth Trade Dispute Heats Up, Scientists Seek Alternatives.")

More than half of all rural Indians, about 400 million people, have no access to electricity at all. But the massive blackout spotlighted a major problem that plagues the remainder—an outdated and inadequate power grid that contributes to frequent smaller power shortages and widespread outages. India's per capita energy consumption is expected to double by 2020 and, barring major improvements in energy sources and supply, a bad situation is likely to become worse. (See "India Power Outage Spotlights Energy Planning Failure.")

But India is not alone in facing large snafus on its power grid. A variety of causes have led to historic blackouts in the Northeastern United States, Western Europe, Brazil, and other locales. (See: "Pictures: World's Worst Power Outages.")

Photograph by Rajesh Kumar Singh, AP

Tensions Over Energy Flash Points

Twenty percent of all the world's oil passes through the Strait of Hormuz (seen here from the space shuttle Columbia) from the Persian Gulf (top) to the Gulf of Oman (bottom) and beyond to the Indian Ocean. Iran, located on the east shore (right), holds the power to shut down this vital conduit with potentially devastating consequences for the global economy. (See: "Iran's Undisputed Weapon: Power to Block the Strait of Hormuz.")

In a world where energy is an increasingly vital commodity, such flash points are of major strategic importance—but none eclipses Hormuz. During Iraq's 1990 invasion of Kuwait, 4.3 million barrels of oil a day were blocked from the market, causing world prices to double. A Hormuz blockade would cut off a total market share three times larger. (See: "Strait of Hormuz: The World's Key Oil Choke Point.")

In the East China Sea, Japan and China continue to spar over a group of small, uninhabited islands along the disputed maritime boundary between the two nations. While nationalism plays a role in the quarrel, the area's enormous natural gas deposits are a key factor. (See: "Why are China and Japan Sparring Over Eight Tiny, Uninhabited Islands?")

And while climate change is making Arctic energy resources more accessible, it's also sparking international competition for them. Players include the United States, Russia, and other European Union nations with Arctic territories—but China has also invested heavily in the region. (See: "Shell Scales Back 2012 Arctic Drilling Goals.")

Photograph from NASA/Corbis

Supercomputing Advances

Titan, a supercomputer at Oak Ridge Leadership Computing Facility in Tennessee, is the world's fastest supercomputer-but with the speed at which technology is advancing, the title may not be safe for long. Another Oak Ridge machine, Jaguar, was the world's top computer in 2010, but has been overtaken by three other computers, including Titan, in just two years.

Just how powerful is this artificial brain? Titan's calculating power is the same as each person on Earth, 7 billion in all, simultaneously solving some 3 million math problems every single second.

Supercomputing power like Titan's could lead the way to the design of tomorrow's more fuel-efficient engines. By modeling and predicting how new fuel and engine system combinations work in fine detail, these machine could help scientists more easily identify the top efficiency gains. (See "Supercomputing Power Could Pave the Way to Energy-Efficient Engines.")

Photograph courtesy Charles Brooks, Oak Ridge National Laboratory

New Frontiers, and Cautions, for Gas

The U.S. Energy Information Administration (EIA) and International Energy Agency (IEA) project that supercharged U.S. oil and natural gas production will increasingly fuel the transportation and manufacturing sectors, even growing so fast that it outpaces domestic demand and sparks a rise in exports. (See: "Natural Gas Nation: EIA Sees U.S. Future Shaped by Fracking.") But while it's clear that the U.S. is sitting on some enormous reserves, experts don't agree on just how much gas is available or how long it will last. (See: "Estimates Clash for How Much Natural Gas in United States.")

The rise of fracking has allowed the U.S. to develop oil and gas resources that were previously unrecoverable at a reasonable cost. Now, nations around the world are rushing to realize a similar boom. China's shale gas deposits are 50 percent larger than even those of the U.S., but their recovery will require clearing some unique geological and technological hurdles. (See: "China Drills Into Shale Gas, Targeting Huge Reserves Amid Challenges.")

Israel, too, is working to exploit gas stores off its coast in the Mediterranean Sea. While small by international standards, at perhaps a quarter of the size of Alaska's North Slope, the field could provide newfound self-reliance for energy in a nation that has been entirely dependent on imports. (See: "New Natural Gas Wealth Means Historic Change for Israel.")

Meanwhile, fracking continues to raise serious safety and environmental concerns. An IEA report concluded that fracking's big potential comes with an outsized environmental footprint. "The scale of development can have major implications for local communities, land use and water resources," the report read. "Serious hazards, including the potential for air pollution and for contamination of surface and groundwater, must be successfully addressed." (See "International Agency Calls for Action on Natural Gas Safety.") Such concerns have led some jurisdictions, such as New York, to sit out the fracking boom—at least until they are convinced it can be done safely. But in other places such as the United Kingdom, where a moratorium on fracking was lifted in December, the "dash for gas" will continue to shape the energy future. (See "U.K. Dash for Shale Gas a Test for Global Fracking.")